Month: February 2018

Earnings, Stock Prices, and the Voting Machine

“The stock market is a voting machine rather than a weighing machine. It responds to factual data not directly, but only as they affect the decisions of buyers and sellers.”- Graham and Dodd, Security Analysis Earnings drive stock prices – so says investing lore. As earnings rise or fall, stock prices move higher or lower by […]

  • Posted in Equities, Markets
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Still Easy After All These Years

  • Fed
  • Charlie Bilello

Let’s pretend you were living in a bunker since February 2009 with no access to the outside world. You come out of the bunker in February 2018 and are presented with the following facts: 1) The U.S. economic expansion is now eight and a half years long, the 3rd longest in history at 102 months […]

  • Posted in Fed
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Inflation! Deflation! Two words that strike fear into the hearts of investors. Are such fears justified? Let’s take a look… If we segment calendar year changes in the Consumer Price Index (CPI) into quintiles, we observe the following: The lowest equity returns have occurred in deflationary (quintile 1) and inflationary (quintile 5) environments. The highest […]

Every major developed country central bank in the world is maintaining negative real interest rates in what is now the 9th year of a global economic expansion. Source Data: and Pension Partners, as of February 1, 2018. Real interest rates = nominal interest rates minus the inflation rate (CPI = consumer price index). Why […]

  • Posted in Commodities, Fed, Inflation
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Trend Following in Bitcoin

  • Bitcoin
  • Charlie Bilello

Back in the middle of December, I was brought into a group text conversation about – what else – Bitcoin. “I’m just going to buy it and ride this uptrend for as long as it lasts. What do you think, Charlie?” My response: I’m not sure you’re going to like this answer, but here goes… […]

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